TREASURY

Anti-Avoidance (Tax Policy)

David Gauke: The Government are fully committed to tackling tax avoidance and will take necessary steps to protect the Exchequer and maintain fairness in the tax system.
	At the June Budget the Government set out their commitment to improving predictability and stability in the tax system in "Tax policy-making: a new approach". In that discussion document, the Government announced that they will adopt a more strategic approach to the risk of avoidance. By building in sustainable defences to avoidance we will reduce the need for frequent legislative changes and limit the cases when the changes are introduced with immediate effect.
	However, there will still be occasions where the Government need to introduce immediate changes to legislation in order to address significant avoidance risks. The Government's response to these risks will be balanced with their commitment to improving predictability and stability in the tax system. The Government will shortly publish a draft protocol that will set out the circumstances in which they will consider changing legislation with immediate effect. This will be published alongside the Government's response to the consultation on improving tax policy making on 9 December.
	It is within this context that the Government are announcing today a number of changes to legislation to tackle tax avoidance. Some of these have immediate effect.
	Group Mismatches
	The Government are introducing legislation taking effect from 6 December to counter tax avoidance schemes that aim to reduce a group's liability to corporation tax through asymmetrical tax treatment of intra-group loans or derivatives (group mismatch schemes).
	The legislation amends section 418 of the Corporation Tax Act 2009. Section 418 was introduced to block schemes that involve the provision of intra-group finance through the use of convertible securities. In the schemes the debtor company claims tax deductions for larger amounts than the credits on which the creditor company is chargeable. The amendments ensure that section 418 will apply where:
	a company connected with the creditor company is or may become entitled or required to acquire shares in a company; or
	amounts are taken into account under the loan relationship rules in determining the chargeable profits of a controlled foreign company.
	Because of repeated avoidance in this area, and following the issue of a discussion document in March, HMRC has today published a technical note containing draft legislation to tackle group mismatch schemes using a principles-based or generic approach. This legislation will come into force from the date of Royal Assent to Finance Bill 2011, following further consultation on the detail.
	Derecognition
	The Government are introducing legislation taking effect from 6 December to counter tax avoidance schemes involving accounting derecognition. This follows consultation on a technical paper published by HMRC on 6 July.
	The proposed legislation amends sections 311 and 312, and sections 599A and 599B, of the Corporation Tax Act 2009. This legislation addresses avoidance schemes under which, in accordance with generally accepted accounting practice (GAAP), amounts that are taxable under the rules on loan relationships and derivative contracts are not fully recognised in a company's accounts. In such cases, a company's corporation tax computations must be prepared on the assumption that all such amounts were fully recognised. The legislation currently applies only where a number of specific conditions are met, and has been amended on a number of occasions since its introduction in 2006, in response to new avoidance schemes that purport to circumvent the conditions.
	As a result of persistent avoidance using derecognition schemes, the Government are announcing that the legislation will now apply as a general rule, without reference to specific conditions, wherever a company is a party to tax avoidance arrangements and, in accordance with GAAP, amounts are not fully recognised in its accounts. In addition, a company will be denied a debit for a loss arising on derecognition of a loan relationship or derivative contract, again where the company is party to tax avoidance arrangements.
	Further details are contained in a draft explanatory note published on HMRC's website today, together with the proposed draft legislation.
	Disguised Remuneration
	As confirmed at the June Budget, the Government will introduce legislation to tackle arrangements involving trusts or other vehicles used to reward employees, which seek to avoid or defer the payment of income tax or national insurance contributions (NICs), including to provide a tax-advantaged alternative to saving beyond the annual and lifetime allowances available in a registered pension scheme.
	A further announcement will be made shortly.
	Functional Currency-Investment Companies
	Draft legislation will be published on 9 December 2010, alongside other draft clauses for Finance Bill 2011, to counter avoidance involving changes in the functional currency of an investment company. The legislation will take effect for accounting periods beginning on or after 1 April 2011. This will ensure that when a UK resident investment company changes its functional currency no foreign exchange gains or losses arising from loan relationships or derivative contracts will be brought into account for tax purposes in the first period of account using the new functional currency.
	At the same time, investment companies will be able to elect, prospectively, for a different functional currency for tax purposes than the currency used in the accounts.
	VAT Supply Splitting
	Draft legislation will be published on 9 December 2010, alongside other draft clauses for Finance Bill 2011, to counter avoidance relating to the supply of services where arrangements have been made for the supply of printed matter that is ancillary to those services to be made by a different supplier.
	The VAT Act will be amended to withdraw zero-rating from printed matter where it is ancillary to a differently rated service, and where, if the service and printed matter had been supplied by a single company, the printed matter would not have been zero-rated.
	The legislation will come into force from the date of Royal Assent to Finance Bill 2011, following consultation on the detail.
	General Anti-Avoidance Rule
	As announced in the June 22 discussion document "Tax policy making: a new approach", HMRC engaged informally over the summer with a range of interested parties to consider whether there was a case for a general anti-avoidance rule (GAAR) in the UK. Those discussions showed that there was some support for such a rule, but it was clear that there were also concerns that a rule would generate uncertainty about the tax treatment of business transactions and about how that uncertainty could be managed in practice.
	I am setting in train a study programme to establish whether a GAAR could be framed to meet the objectives of deterring and countering tax avoidance in a fair way, while providing certainty, retaining a tax regime that is attractive to business and minimising compliance costs for businesses and HMRC and, if so, how the provisions of the GAAR might be framed.
	This study will be led by Graham Aaronson QC, supported by a small group of experts. The membership of the group is being finalised, and details will be announced in January. The group will complete its study by 31 October 2011, informing Ministers of its conclusions and, if applicable, providing model provisions and explanatory notes. The Government will consider the outcome of this work as part of the Budget decision-making process, taking account of the impact on certainty for taxpayers as to the tax treatment of transactions and the implications for HMRC in terms of costs and other priorities. The Government would not introduce a GAAR without further formal public consultation.
	I will place a copy of the terms of reference for the group in the Library of the House.
	Disclosure of Inheritance Tax Avoidance
	HMRC are today publishing a document in response to the consultation on bringing IHT on transfers of property into trust within the disclosure regime (DOTAS). The Government will, as planned, bring such transfers within DOTAS, but will make some changes to its implementation as a result of the consultation. The necessary regulations, taking into account those changes, will come into effect on 6 April 2011.

E-Communications (Mutual Sector)

Mark Hoban: The Government are committed to fostering diversity in financial services, promoting mutuals and creating a more competitive banking industry. Much of the legislation applying to mutuals has existed for a long time and an up-to-date legislative framework is a pre-requisite to a successful mutual sector.
	Mutual societies are under a number of statutory obligations to communicate with their members or the public in the conduct of their business. Today the Government published a consultation document that proposes to amend legislation that will facilitate the use of electronic communications, such as e-mail, by the mutual sector to discharge these statutory obligations and allow mutuals to reduce their administrative costs.
	The deadline for responses to the consultation is Friday 28 January 2011 and electronic copies of the consultation document, which includes the draft statutory instruments, will be deposited to the Libraries of both Houses of Parliament.

CULTURE MEDIA AND SPORT

National Broadband Strategy

Jeremy Hunt: I am pleased to announce that I will be publishing a national broadband strategy today. The strategy sets out how the Government plan to deliver their ambition to have the best superfast broadband network in Europe by 2015 and build on the commitments I made in my statement to the House on 8 June 2010.
	A first class broadband infrastructure is essential for creating jobs, opportunities and economic growth in the digital age. Our country needs a reliable and secure broadband capability that encourages innovation and creativity, supports the year-on-year growth of our digital industries-now worth £130 billion or 10% of gross added value, and meets the growing demands of its 40 million users.
	To that end, I was delighted to secure an unprecedented £830 million of public investment for broadband as part of the recent TV licence fee agreement.
	The strategy published today will outline how Broadband Delivery UK (BDUK) will use the £530 million available in this spending review period to support broadband and stimulate further private sector investment. It sets out the goal of delivering a fibre point in every community in the UK by the end of this Parliament, bringing superfast broadband within reach of communities urban and rural, and commits to ensuring that homes and businesses right across the UK are able to access a decent level of connectivity, even in the most remote areas.
	The strategy includes:
	a mixed-technology approach with fixed, wireless and satellite all having a role. It is recognised that one technology is not suitable for all circumstances, although high capacity fibre optic is likely to be a key feature of the UK's network;
	ensuring access to existing infrastructure, including BT's network of ducts and poles and encouraging owners of other networks to develop new revenue streams through selling access to their infrastructure;
	new guidance prepared in conjunction with the British Standards Institution and Building Research Establishment to builders and contractors on how to ensure new buildings are broadband-ready in the form of a publicly available specification (PAS 2016);
	a commitment to the liberalisation of the 800MHz and 2.6GHz spectrum, to allow the development of next generation mobile services; and
	working with local authorities to clarify existing guidance on streetworks and micro-trenching with the aim of reducing the cost of broadband roll-out.
	I will also be announcing my proposal to use £50 million of the £530 million allocated in the spending review to support a further wave of rural projects in addition to the projects already announced in the Highlands and Islands of Scotland, Cumbria, Herefordshire and North Yorkshire.
	A copy of the strategy and a full copy of my speech will be deposited in the Libraries of both Houses.

EDUCATION

Children's Commissioner Review

Sarah Teather: This Government are a proud signatory of the United Nations Convention of the Rights of the Child (UNCRC), are committed to its implementation, and believe it is vital that children and young people have a strong, independent advocate to champion their interests and views and promote their rights. That is why on 12 July this year the Secretary of State for Education invited Dr John Dunford to undertake an independent review of the Children's Commissioner for England. Today the Government publish his report and recommendations, which I welcome. I know this is an issue of great interest to many parliamentarians, and I have placed a copy of the report in the House Library.
	In summary, Dr Dunford has concluded that there is a need for a Children's Commissioner if Government are to meet their commitment to implement the UNCRC. He recommends a strengthened remit to promote and protect children's rights, with the role incorporating the responsibilities of the children's rights director at the Office for Standards in Education, Children's Services and Skills (Ofsted) and also being able to assess the impact of new Government policies on children's rights. Dr Dunford recommends greater independence, with the commissioner submitting an annual report, and any other reports, direct to Parliament as well as to Government, rather than reports being submitted to Parliament through the Secretary of State for Education, as at present. It will be for Parliament to determine how else it would like to engage with the new Children's Commissioner. The full implications of Dr Dunford's recommendations will take some months to work through, but the Secretary of State and I are pleased to accept them now in principle and will consult in due course on legislative changes.
	Dr Dunford was asked to consider the commissioner's powers, remit and functions, the relationship with other Government funded organisations carrying out related functions and value for money. He has carried out a thorough review of the evidence, for which I am grateful. His call for evidence attracted over 200 responses from adult organisations and individuals and over 700 responses from children and young people. He has held extensive discussions with organisations that work with and for children and young people, MPs and peers, and the children's rights director's office. He has also visited the Children's Commissioners in all four countries of the UK and Ireland, and commissioned an academic review of the international evidence.
	The conclusions that Dr Dunford has drawn are powerful. His review makes a convincing argument for the need for a Children's Commissioner, and I accept that without one there would be significant implications for children's lives and for the UK's international standing. Dr Dunford has assessed whether the role of the Children's Commissioner meets the Cabinet Office tests against which all arm's length bodies have been reviewed, and I accept his view that it does so.
	I have noted that despite some achievements on specific issues, the impact of the Office of the Children's Commissioner to date shows a clear need to reform its remit and operating model. I accept Dr Dunford's proposals that the role should be in accordance with the United Nation's Paris Principles for Human Rights organisations, with responsibility for promoting and protecting children's rights on the basis of the UNCRC, and reporting directly to Parliament as well as to the Department for Education. I also agree with Dr Dunford that within these rights lies the responsibility for children to respect the rights of others, and that this should better enable children to act as young citizens and reinforces the proper exercise of authority by parents and other adults such as teachers.
	The Secretary of State is clear that the Children's Commissioner must represent value for money in exercising its powers and functions, and Dr Dunford has identified opportunities in this regard. While accepting that the commissioner needs to be adequately resourced to fulfil the role, I believe that all public funding should be used in accordance with the Cabinet Office's efficiency guidelines for arm's length bodies, and that this need not compromise independence or statutory powers and duties. Dr Dunford recommends merging the functions of the Office of the Children's Commissioner with the children's rights director in Ofsted, providing the opportunity for greater coherence and impact, and scope for savings. I believe that this is a sensible way forward, and will be discussing next steps with Her Majesty's chief inspector. Dr Dunford has also identified that the salary of the Children's Commissioner is excessive in comparison to others in similar roles and I will address this in setting up the new arrangements.
	Dr Dunford's recommendations mean that the statutory basis and form of the Office of the Children's Commissioner must change. I will consult in due course on legislative changes. In the interim, the current role and functions of the Children's Commissioner will continue. This includes the commissioner's remit over non-devolved matters impacting on children and young people in Northern Ireland, Scotland and Wales. I do understand the difficulties that the current position presents for the Children's Commissioners in the devolved Administrations. I will want to work with them to achieve a situation, within the devolution settlements, where the interests of children in Scotland, Wales or Northern Ireland can be fully represented by the commissioner for that jurisdiction.
	While it will take some time for any legislative changes to take effect, I am determined to act in the spirit of Dr Dunford's recommendations as soon as possible. The Secretary of State does not intend to use his current power to direct the Children's Commissioner to undertake an inquiry, and while the current legislation will still mean that the commissioner needs to consult him prior to undertaking an inquiry, the Secretary of State will be happy to offer his views but will not expect to have any role in how the commissioner then decides to proceed.
	Dr Dunford recommends that a reshaped Children's Commissioner for England holds Government to account against the UNCRC. I agree with Dr Dunford that for this to deliver benefits to children, Government and policy makers must be receptive to that approach and advice. I can therefore make a clear commitment that the Government will give due consideration to the UNCRC articles when making new policy and legislation. In doing so, we will always consider the UN Committee on the Rights of the Child's recommendations but recognise that, like other state signatories, the UK Government and the UN committee may at times disagree on what compliance with certain articles entails.
	In conclusion, Dr Dunford's recommendations should result in a Children's Commissioner that has greater profile and credibility, and can better impact on children's lives. At the centre of this coalition Government's thinking is a determination to see children and young people achieve to their full potential, and the desire to empower individuals to shape their own future. I believe that reinforcing our commitment to children's rights, and creating a stronger independent advocate for those rights, is an important part of delivering on that ambition.

Childhood (Commercialisation and Sexualisation)

Sarah Teather: I am announcing today an independent review of the commercialisation and sexualisation of childhood.
	Parents express real concern about children being pressured into growing up too quickly, to become consumers or sexualised adults earlier than is appropriate. The Government have therefore made a commitment to take action to protect children from excessive commercialisation and premature sexualisation.
	I have asked Mr Reg Bailey, chief executive of the Mothers' Union, to conduct an independent review of the issue and to make a full report with recommendations in May 2011. I should like the review to take a wide-ranging and independent examination of the evidence and provide recommendations that identify measures that will result in businesses collectively and individually changing their behaviour and which empower consumers to voice their concerns more effectively. To that end, I have asked Mr Bailey to consider the views of both consumers, particularly parents but also children themselves, and the business community; as well as drawing on the expertise of existing regulators and other experts in the field.
	In undertaking his review, I have also asked Mr Bailey to build on the previous reviews conducted by Professor David Buckingham on the impact of the commercial world on children's wellbeing, by Dr Linda Papadopoulos on the sexualisation of young people, and by Professor Tanya Byron on child safety in a digital world. I have asked Mr Bailey to examine the evidence in these reviews and more recent research and to produce robust and challenging recommendations for Government to consider in the following areas:
	Risks of harm of commercialisation and sexualisation and barriers to parenting;
	Principles (what is acceptable in this area and what is not);
	Consumer voice; and
	Corporate social responsibility relating to children.
	Copies of the Minister of State for Children and Families' letter asking Mr Bailey to carry out the review will be placed in the Libraries of both Houses.

TRANSPORT

Ship-to-Ship Transfer Regulations

Michael Penning: I wish to inform the House of the outcome of the review of the Merchant Shipping (Ship-to-Ship Transfers) Regulations 2010.
	On 8 July, I announced the review of the regulations and I asked all interested parties to make representations to me by 30 September. On the same day, I also laid a statutory instrument-the Merchant Shipping (Ship-to-Ship Transfer) (Amendment) Regulations 2010-before the House, in order to defer the coming into force date of the regulations from 1 October 2010 until 1 April 2011.
	During the period of the review, from 8 July to 30 September inclusive, I received 32 written representations and held three meetings with interested parties at their request.
	In considering these representations, I have been left in no doubt that this is an important issue-not only for the shipping companies who benefit from these practices, but equally for local residents who have concerns about the potential impact of any accident on their coastline. In deciding how best to proceed, it has been necessary to strike a balance between ensuring that these operations are properly regulated, while recognising the benefits of ship-to-ship transfer.
	On the basis of the written representations and the points made to me in meetings conducted in the context of the review, I have drawn the following conclusions:
	I intend to change the policy on ship-to-ship transfers outside harbour authority areas. Instead of a general prohibition, there will be a regime which will:
	restrict ship-to-ship transfers outside harbour authority areas to a single designated area within the UK territorial sea;
	establish a system of permits issued by the MCA; and
	give effect at the same time to the new chapter 8 of annex I to the MARPOL convention.
	I intend to maintain, without change, the policy of requiring oil transfer licences for harbour authorities. Harbour authorities which already have a history of hosting ship-to- ship transfers will, of course, continue to benefit from transitional arrangements.
	I shall also take account, in reshaping the policy, of some specific instances where a type of ship or a type of activity needs to be treated in a way which departs from the general rules, or where the application of the rules needs to be adjusted to allow normal harbour activities to continue unhindered.
	The Department's officials will now proceed to draft the necessary amending legislation, on the basis which I have described. I shall be taking a keen interest in the progress which they make.
	I will be placing an analytical table, which summarises the points of substance made in the written representations and the meetings held with interested parties, on the Department's website and in the Libraries of both Houses.

WORK AND PENSIONS

Disability Living Allowance Reform

Maria Miller: I am publishing today "Disability Living Allowance reform", a formal public consultation on our proposed reforms to disability living allowance (DLA).
	We are already undertaking large-scale reform of the welfare system, for example the universal credit and our flagship Work programme. Our welfare reforms are designed to protect people in the most vulnerable situations, including disabled people. We remain steadfast in our support for the principles of DLA, as a non-means-tested cash benefit contributing to the extra costs incurred by disabled people.
	However, DLA has not been fundamentally reformed since it was introduced in 1992. We now have a disability benefit which is confusing for individuals to understand, based on unclear criteria and often results in inconsistent awards, and since 1992, both the case load and the cost of DLA have grown to a level that is unsustainable. Changes to DLA are long overdue and must address questions of fairness and value, while supporting disabled people to lead independent lives. We must ensure DLA better reflects the needs of disabled people today, rather than in the 1990s, and that it enables support to be targeted to those with the greatest need.
	This is why I want to bring disability benefits into the 21st century by replacing DLA with a new benefit-personal independence payment. This is an opportunity to improve the support for disabled people and enable them to lead full, active and independent lives. Personal independence payment will maintain the key principles of DLA, but it will be delivered in a fairer, more consistent and sustainable manner. It is only right that support should be targeted at those disabled people who face the greatest challenges to leading independent lives and this reform is required to enable that, along with a clearer assessment process.
	The consultation document sets out our proposals and seeks responses from disabled people and disability organisations. The document covers:
	The need for reform, including the rising case load and expenditure and what we believe is wrong with the current benefit;
	Our proposals for reform including the new objective assessment, taking into account aids and adaptations, eligibility criteria, the treatment of children and over 65s, and signposting claimants to support to help them manage their condition; and
	How we envisage the benefit being delivered, including the benefit's role as a passport to other support and integration with other support, such as adult social care.
	We welcome views from across Great Britain on the DLA proposals, conceived within the framework of a 21st century welfare system that is efficient, effective and above all fair.
	Copies of the consultation paper are available in the Vote Office, and will be available shortly at http://www.official-documents.gov.uk/menu/cmd2010.htm.
	The consultation period will be from 6 December to 14 February 2011. I will make a further statement regarding the response shortly after the consultation period ends.

Social Fund Budgeting Loans

Steve Webb: The social fund helps people to meet additional costs they may find it difficult to budget for. This is especially true when people on the lowest incomes are facing difficult and expensive times in their lives such as having a child or paying for a relative's funeral.
	This is why, in the forthcoming Welfare Reform Bill, we will introduce legislation to make social fund budgeting loans available to help families to buy maternity items or items for a new baby or to help them towards meeting some of the costs of a relative's funeral. This help will be available in addition to the Sure Start maternity grant and the social fund funeral payment from late next year.